As Executor, you are stepping into the shoes of the dearly departed. You were likely chosen because you are fair and organized, responsible and impartial and you have good judgment.
It is your legal obligation, as fiduciary, to carry out a high standard of care when managing and distributing estate assets. You have a duty to maximize estate assets, while at the same time minimizing waste.
As Estate Trustee, you will be compensated for your time and efforts. But make sure your compensation is fair and reasonable and based on the complexity and magnitude of the estate.
You are entitled to 5% 1 of the total value of the estate but this may be reduced by any fees you paid for services that should normally be performed by the executor. If compensation amount is not expressly stated in the Will, or if the amount is excessive, executor compensation can be challenged by the beneficiaries.
What are your immediate responsibilities?
- Locate and review the Will. Only written Wills are accepted in Ontario
- Secure all properties and assets, being sure to collect all keys
- Make funeral arrangements
- Identify, locate and confirm all beneficiaries (They will often locate you first!)
- Seek legal advice
- Prepare an inventory of the estate
- Is there a safety deposit box?
- Jewelry, art collections, antiques or coins?
- Life insurance or other policies?
- Bank accounts, investments, digital assets; IE Cryptocurrency?
What are the next steps?
- Open an Estate account at the bank
- You may need to advertise for creditors in the newspaper or on Estatably.com
- Apply for Grant of Probate if the estate value is over $50,0002
– You can use a Simplified Process to apply for probate for estates worth less than $150,0002a or less, You will be issued Small Estate Certificate if the application is accepted.
– If the deceased leaves behind a spouse, properties do not necessarily have to be sold if they are joint tenants. - You may need a Capitol Assets appraisal for things like, corporate shares, antiques, gold coins and jewelry. Anything that can appreciate over time
- File the deceased’s final income tax return
- Set aside reserve funds for estimated debt and maintenance costs if there are properties involved
What are your Final responsibilities?
1. Settle any claims against the estate. For example, if the deceased was not able to fulfill a contract. Or file a lawsuit to retrieve funds owed to the deceased.
2. Obtain a clearance certificate from CRA stating that nothing more is owing. This can take up to 2 years and will be a sigh of relief for you, the executor. But remember, you are an Estate Trustee for life! Future disputes and challenges may arise. But technically, an estate is considered to be wrapped up when all debts are paid and all funds have been distributed.
3. Prepare final releases and distribute assets to beneficiaries, as directed in the Will.
You may be about to execute a Will that is no longer valid. For example, if the deceased was not of sound mind or was a victim of undue influence at the time of writing the last Will and Testament. If the Will is determined to be invalid or if there is no will, the provincial government has guidelines under the Ontario’s Succession Law Reform Act and will disburse estate assets based on those laws.
As of this year, marriage no longer revokes the Last Will.
Estates can be daunting but know that there are tools and options:
- You can purchase Executor Insurance from Eassure if you know you will be managing a large, complex estate, or if you foresee any problems. You will be held personally liable if you make administrative errors that cost the estate. Or if beneficiaries dispute the value of a collection that was not appraised or if they do not agree with your compensation. Executor insurance will provide funds for any legal fees or court ordered restitution.
- You can hire a professional estate trustee who can execute the estate alone or alongside you. Their fee is normally a percentage of the value of the estate.
- If you do not think you have the time to devote to the immediate responsibilities and duties, you can refuse to accept the appointment of estate trustee. This is best done before the deceased passes away, so they can choose someone else.
There are many complexities involved in executing an estate, that cannot all be addresses here. As a Certified Executor Advisor, I can help guide you through the process along with other professionals, such as accountants and lawyers.
1 “Executors Compensation” https://ontario-probate.ca/executor-role/executors-compensation
2 “Probate of a Small Estate” https://ontario.ca/page/probate-small-estate
2a “Small Estate Certificate” https://ontario.ca/page/probate-small-estate
About the Author: Christine Connolly is a Financial Advisor and Certified Executor Advisor
If you missed part one of this series read about Choosing an Executor